Introduction to Commercetools

Commercetools, a leading "headless commerce" platform providing APIs for companies to build online storefronts, experienced significant growth in recent years. In 2021, the company raised funds at a $1.9 billion valuation as the COVID-19 pandemic accelerated the shift to online shopping. However, the current market landscape poses new challenges for Commercetools.

Recent Developments

TechCrunch has confirmed that Commercetools has laid off dozens of employees, including around 10% of its staff, due to failing to meet sales growth targets. The company is also undergoing executive changes, parting ways with its chief revenue officer and CFO, and reassigning roles within the organization. CEO Andrew Burton stated in a memo that the company has not fully achieved its aggressive revenue growth targets, prompting a re-evaluation of its strategy.

Restructuring and Executive Changes

The memo outlines "significant" restructuring in marketing, sales, and internal operations, as well as select staff cuts in customer and product development. The company is providing severance packages and continued benefits to affected employees. Executive changes include the departure of the chief revenue officer and CFO, with the sales team reporting to the CEO and the finance, digital solutions, and legal teams reporting to the COO.

Market Shifts and Challenges

The e-commerce market has continued to grow, but at a slower pace than in previous years. The U.S. Census Bureau reported a 2.7% growth in retail e-commerce from Q3 to Q4 2024, with companies like eBay experiencing sluggish sales growth. Commercetools faces increased competition from Shopify and new marketplaces like Temu, Instagram, and TikTok, which are changing the game for e-commerce companies.

Memo from CEO Andrew Burton

The full memo from CEO Andrew Burton is published below, outlining the company’s decision to restructure and implement targeted changes to navigate the turbulent market.

Memo

Subject: Important Update

Hi team,

We set ambitious goals, anticipating strong market growth. However, we haven’t fully achieved our aggressive revenue growth targets. This reality has required us to take a hard look at where we fell short, where we showed strength, and what needs to change to build a stronger future.

As part of this, we made the difficult decision to restructure a few teams, implement targeted reductions in specific areas, and eliminate some roles. This decision is not a reflection on individual commercetoolers, their talent, dedication, or impact, but instead a necessary step to sharpen our focus and re-position commercetools to be in a stronger position to navigate and succeed in this turbulent market.

Many of you have built strong relationships with the colleagues who are leaving today. They have shaped commercetools in ways big and small, and we are truly grateful. We are providing all impacted employees with severance and continued benefits above the market standard. Additionally, we are continuing their access to OpenUp, our online platform offering diverse mental health support resources, to support them in this transition.

I know this is hard news to process. Change brings uncertainty, and we are committed to providing as much clarity, support, and direction as possible. To help answer common questions, we’ve put together an Employee FAQ that outlines key details about the restructuring, resources available, and what’s next.

To give everyone space to reflect, we are giving all employees this Friday, February 28th as a day off.

Your executive leader will meet with your department later today or tomorrow to discuss what this means for you and your team.

What’s Changing

C-level Updates:

• Bruno Teuber (CRO) – Transitioning out of the executive team, staying as an advisor until the end of H1. A new CRO search has started; in the interim, sales will report to me.
• Dan Murphy (CFO) – Transitioning out of the executive team, advising until the end of H1. CFO role will not be backfilled; Finance, Digital Solutions, and Legal will report to Matt Tuel (COO).
• Denis Werner (Chief Information Security & Compliance Officer) – Moving to a compliance-focused role under Dirk Hörig. IT Ops moving to Digital Solutions under Matt Tuel, Information Security moving to Product under Hajo Eichler, and Office Management moving to People under Roxana Dobrescu.

Teams with Significant Restructuring:

• Marketing (including BDRs) – Realignment to focus on enterprise GTM model and sales PODs.
• Sales & Operations – Restructuring to improve sales support and focus on top markets/customers.
• Enablement Functions (Finance, People, etc.) – Consolidating teams for better operational efficiency.
• Other Impacted Areas – Select cuts in Customer and Product Development after reviewing performance and impact.

Change is never easy, but it’s at the core of what we do — helping businesses adapt to new realities. Now, we’re doing the same. In our Company All Hands tomorrow, we will walk through these changes in more detail — the why, what, and how we move forward together — staying true to our belief in adapting boldly to build what’s next.

Andrew